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tv   Nightly Business Report  PBS  June 24, 2014 1:00am-1:31am PDT

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this is nightly business report with tyler mathisen and suzie guerin. >> within reach, the dow may have snapped its winning streak, but 17,000 points away. which stocks got us here, and which may lead the next leg. home sweet home, it was the biggest jump for existing home sales in three years. is the housing market finally on firmer footing? and rainy day funds more than a quarter americans have no emergency savings. there's a relatively simple way to get more money in your piggybank. we have all that and more tonight on the nightly business report for monday june 23rd. >> tyler mathisen is off again this evening. it looks like down 17,000 is going to have to wait another day.
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stocks have been on a tear lately as you know. reaching historic highs for the dow and s&p for friday. both the averages kicked off the new trading week with some modest declines. a new round of mergers would normally send stocks higher but not today. the dow is down nine points, the nasdaq managed to eke out a fractional gain enough for a 14-year high, and the s&p was down by about a quarter point. even with today's decline, the dow is just 63 points from the 17,000 mark. rallying 2% this year. with a week to go in the first half of this year, dominick chu takes a look at what helped the stocks get to this point and what may happen in the next leg. >> reporter: a be hadful of stocks helped propel the dow toward the 17,000 mark. since then intel has been a star
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perform performer, shares are up 19% during that time frame, then there's pharmaceutical giant merck. the single best performing stock in the dow industrials over that timespan has been construction and money for caterpillar. it's up a whopping 34%. now, the question for many investors is, where will the next round of leadership in the stock market come from. >> some of the areas that look attractive for us are the technology space. a lot of next generation technology companies that are focused on cloud and next generation architecture were sold off very hard in march and april. i think also in the discretionary space, some of the mid cap retailers continue to look attractive to us. >> of course, there will be more to consider as well.
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>> i think you need to keep your eye on interest rates, if they're moving too far too fast, that would probably be the beginning of a more substantial correction of the stock market. >> regardless of the risks, it's important for each individual investor to gauge their own appetite for how much they want to take. >> the thing investors should be most concerned about is their own intestinal fortitude. they need to remain committed to stocks if they meet their long term goals. >> the stock market highs doesn't mean there are not opportunities. for nightly business report, i'm dominick chu. >> good news about american factories. they're keeping busy, very busy. this month's reading of u.s. manufacturing was the highest it's been in four years. a london based research firm says production and hiring expanded in june. >> good news in housing today,
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sales in existing homes saw a stronger than expected leap in may, rising nearly 5% from april's rate. that was the biggest one-month gain in three years. realtors do cite a combination of more listings and stronger employment data for driving sales higher right now. and there may be more than that. >> in burbank, california. the housing market is finally getting more stable. but stable doesn't translate into sold. >> there are so far more homes for sale, there's a lot more inventory. at the same time, the number of buyers increased a lot. in the west where weather wasn't a factor sales struggled. up less than 1% month to month, and down a stunning 11% from a year ago. >> the buyers see overpriced
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listings, what we've observed is that buyers tend to shy away from those listings. the median home bryce in may up 1.5% year over year. the smallest increase since march 2012. >> anecdotally, we're finding there's more buyers than sellers, multiple biddings. and many of the buyers frustrated by lack of choices. >> distressed sales in may fell to the lowest levels since the realtors began tracking it since the crash. 16% of all sales and first time home buyers are not picking up the slack. while the remnants of the housing recovery begin to fade-away, the market isn't exactly back to normal yet. >> young people are still recovering from a rough recession. they're starting to move out of their parents home into their own rentals, but not yet into first time homes they're buying. >> the last piece of the recovery puzzle that has yet to
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fall into place. for nightly business report, i'm diana olick in washington. in one ruling, the supreme court made it harder for investors to band together to pursue class action lawsuits when they claim to have been misled by buying or selling stock in a company. the decision will likely cut back on the number of suits that involve enormous sums of money. in a second ruling, a divided court blocked the epa from requiring permits for greenhouse gas emissions at snow or modified facilities. the high court said only congress can make that determination. but the ruling does allow the epa to regulate emissions from industries that are already required to get permits from other types of pollutants that cause global warming. a lot of buzz right now on wall street about that newly elected house majority leader kevin mccarthy in california. he's calling for the export, import bank to be phased out. the government run bank provides loans and credit insurance to
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foreign buyers of american made products. closing that bank would be a big blow for boeing, for example. boeing sees big benefits from that bank's support for u.s. exports. efforts to abolish the export import bank is a sign of a critical view that some ultraconservative lawmakers and tea party candidates have about government practices and policies that are considered business friendly. that's making tuesday's u.s. senate gop primary in mississippi a closely watched race by both little leaders and the business community. john harwood tells us why. it's not just mississippi republicans and national republican leaders who are going to be watching the outcome of tomorrow's u.s. senate runoff in mississippi. american business will be watching too, because there are big stakes for business. on one hand you have six term incumbent thad cochran, on the other, you have tea party favorite chris mcdaniel, a more
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confrontational conservative, he would strengthen the wing of the caucus that takes a skeptical view toward the export import bank. keeping the government open and raising the debt ceiling in certain circumstances. there are two ways this could have an effect depending on the outcome tomorrow, in which mcdaniel is favored to be the nominee. democrats believe they have an outside chance of holding the seat, if chris mcdaniel is the nominee, because he's so far right. you have the question of whether the republican party can adapt and broaden it's appeal for the 2016 presidential race. it's a low turnout election expected on tuesday. but big consequences. for nightly business report, i'm john harwood in washington. it's being called one of the most important events for biotech investors this year, it could result in a break through treatment for patients suffering from cystic fibrosis. that's coming up.
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there is new hope for people suffering from cystic fibrosis, a regiment of medications that some analysts say could be the event of the year in biotechnology. and some wall streeters say it could mean a tremendous boost for shareholders of drug maker vertex. meg terrell has more on this new treatment and what it could mean for the company behind it. >> investing in biotech has always been risky. there's an event coming up that tops all others this year. the expected to report data soon on the combination of drugs for cystic fibrosis. a rare inherited disease that
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causes lung infections and can be fatal by age 40. >> cystic fibrosis is caused by mutations to a gene known as cftr. the protein it creates can't help chloride escape the cell. that leads to the production of thick mucus in airways and other areas. the first medicine to address the genetic root of the disease restores the protein's ability to allow chloride to pass through the cell's membranes. only about 2,000 patients have mutations that it can help. more have a bigger problem. the protein can't get to the membrane at all. vertex is testing another drug which aims to help the protein get to the cell wall. where then calidico enables the passage of chloride. it could help 14 times as many people. that bigger patient population means bigger business. positive data would be a huge driver for vertex's stock.
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analysts say positive results could drive the stock up past 100. a negative outcome could plunge it into the 40s. while cystic fibrosis affects few patients. the drug is priced at about $250,000 a year. and patients take the drug chronically. the drug already draws $371 million in annual sales. all together, analysts estimate, if they work, the cystic fibrosis medicines could bring in more than $5 billion. not to mention the huge difference it could make for patients. gas prices rose just two cents a gallon on average over the past two weeks, get ready to start paying more, because of the conflict in iraq, experts now say drivers should expect prices at the bump to start rising sharply, when the cost of gasoline catches up to the recent rise in oil prices. there is no gasoline needed for this new electric motorcycle unveiled today by none other than harley-davidson.
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now, the motorcycle maker is considering bringing the new environmentally friendly bike to new markets around the globe, as it searches for new customers. morgan brennen with the story. it's called project live wire. harley-davidson's first ever electric motorcycle. it can accelerate to 60 miles an hour in less than 4 seconds, but very, very quietly. with none of that roaring sound that harley once tried to trademark. the motorcycle isn't for sale, instead harley is taking the prototype on a multicity tour, looking for customer feedback, though not necessarily from its core male white baby boomer harley clientele. an electric motorcycle targeting a much younger more global demographic. >> some of the cities like new york city that want to zip around, have the nimble responsiveness this bike delivers. in cities all over the world --
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>> harley is looking to expand its appeal after sales were hit hard in the downturn, and while shipments are now recovering. in 2013, they were still 25% below the company's 2006 peak. core customers have been watching their spending, waiting longer to trade up on bikes. maybe recruitment of new buyers crucial. the electric motorcycle is still likely years from hitting the market. one aren't company's not disclosing the cost. asking price will depend on the evolution of lithium eye on batteries, currently expensive to manufacture, and with a limited battery life, oath about 53 miles per charge. but harley could face an even bigger challenge. >> doesn't make enough noise. >> trying to reinvent the company, without alienating its tried and true customer base. >> i won't buy a scooter, not for me.
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>> for nightly business report, i'm morgan brennen in new york city. >> harley's got to have noise. oracle seals a deal to buy microsystems. that's where we begin tonight's market focus. the tech giant will pay $5 billion for micro's which makes software for restaurants and hotels. the move is an effort to reignite slowing growth. shares of oracle rose a fraction to 41.10. microsystems saw its shares pop by more than 3% to 67.97. alston has agreed to sell most of its nrk business to ge. we told you last week as part of that deal, the french government will require a 20% steak in the company. the $17 billion purchase is ge's biggest acquisition ever, believe it or not. despite the news, shares of ge were down 1% to $26.68. more deals, wisconsin energy,
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integras are increasing. they will serve gas and electric customers in michigan, illinois and wisconsin. shares fell by 3%, shares of integra surged to 12%. here's another update on the allergen takeover battle. allergen advises investors not to sell their shares. the botox maker called the stock prices grossly inaccurate. shares of nordic american surged offshore. nordic is a supplier of offshore energy vessels and it went public earlier this month. shares jumped 13% to $18.76.
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the 2014 drug maker cited strong business performance and said it expects to continue to do well throughout the year. shares rose a fraction to 53.75. a new survey finds that too many americans, especially those between the ages of 30 and 49 have no rainy day emergency savings. why are americans saving less money these days and where does all their money go? sharon epperson takes a look. >> reporter: when it comes to saving for a rainy day, everyone knows what they should do. >> try to save more, try to manage my money a little bit better. >> you can't live check by check, you never know. >> every time you get paid you put something aside. >> reporter: there aren't too many people actually doing it. >> you have money put aside for emergencies? >> i do have money -- yeah, no.
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>> reporter: more than a quarter of americans have no emergency savings. even as the stock market reaches new hights and parts of the economy are slowly starting to improve, americans have made very little progress in their savings. according to a new survey by half of americans have less than three months worth of expenses saved. fewer than one out of four have saved six months or more of expenses. the ideal amount recommended by most financial experts. >> this lack of emergency savings is pervasive in america. even the highest income earning households, the top third households, fewer than half of them have an emergency savings. >> another study found that a quarter of middle class households, those earning between 56,000 and $91,000 a year are considered liquid asset 4. meaning they have less than 3 months worth of savings, to even
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live at the poverty level. that's less than $6,000 for a family of four. >> people are stunned when they see it's not just an issue faced by people who are traditionally viewed as poor. >> 89% of the people in liquid asset poverty are employed, which to me also refutes the stereotypes of people who are living on the financial edge. >> many americans say they don't have the extra money to sock away, their paychecks have stayed about the same, even as there have been modest increases in expenses for food and transportation. that leaves little wiggle room in the budget. and not having a budget, a plan that includes how much to save and spend is another obstacle that prevents households from stashing money away. >> the biggest barrier to savings is not being in the habit of saving. and too many people, they try to do their saving this way. they try to save what's left over at the end of the month. most of the time, nothing's left
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over, so savings doesn't happen. >> a simple step can reverse that trend and get both in the habit of saving. just remember to pay yourself first. for nightly business report, i'm sharon epperson. >> rick adelman joins us now to talk more about how you can save for a rainy day. rick, you heard in our package that the ideal amount to save is six months of a rainy day fund. do you agree with that, and if you are living paycheck to paycheck, how do you even get started? >> i think six months is too low. we learned through the credit crisis of 2008 it was taking people two, three, four years to find new jobs after they lost their old one. six months is not long enough. we advise our clients to have 12 to 24 months worth of spending. that's a really big number i know. but if you found yourself in that predicament, you would be glad to have that cash. >> how do you begin, how do you
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start? where do you come up with the money? just start. it's as simple as that. if you're trying to amass thousands of dollars in reserves from a rainy day fund, put away 20 bucks, 100 bucks, whatever you can out of this paycheck. don't worry it seems like a small amount of money, just get started. for those who are skon vinced they can't afford, to as sharon mentioned in the package, pay yourself first, before you start paying your bills, write a check to yourself and deposit it into a money market account or savings account. you'll still be broke when you pay your bills. my favorite strategy is to use coins. most of us use debit cards or credit cards. knock it off. use cash, and when they give you the change, take the coins and save them.
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i as a plantars peanut can, literally, without trying you'll come up with 50 bucks a month in coins. >> i'm not going to make excuses for people who don't save, but let's face it, we live in a consumer oriented society, where a barrage of advertisements come our way. spend for this, spend for that, you know, the latest vacation and all. that is how we live our lives as americans today, isn't it? >> it is, unfortunately. and the peer pressure to constantly spend really does us in. it is a problem, this is why we have to break out of that habit. have your employer direct some of your paycheck directly to your savings account. many employers will do this by having the money diverted before you get your paycheck, you won't notice it's missing, you can go out and have fun with your
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friends and choose something that doesn't involve spending money. instead of a bar go to a library or a park. do something that doesn't involve spending money. >> so if i started today, right after this show, how long would it take me to put together a six-month rainy day fund? 12 to 24 month rainy day fund. >> two to three years. don't worry it takes a while. you have your whole life ahead of you to pull this off. the longer you delay in starting, the longer it will take to achieve this goal. you don't want to face a car repair or roof leaking or medical crisis without available cash. >> thank you very much, rick
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adelm adelman. >> i'll meet you at the library, how is that? start-ups that are looking to make it big and the potential multibillion dollar marijuana economy. new reports tonight, dow jones received a subpoena from federal officials related to that investigation of activist investor carl icon phil mickelson. the colorado ckanny bus crae has sparked a new kind of rocky mountain high. looking to get in on the ground floor of those budding
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entrepreneurs. josh lipton was there. >> it's a rapidly growing industry. one that is lighting up in the minds of some investors. >> wonderful, welcome back. >> troy dayton is the co-founder and ceo of the art view group, to national canibus investment and research firm. they've invested $10 million in 14 different marijuana industry related start-ups. >> i believe what we're seeing right now, is the first of a great american industry. >> while the excitement about this industry? industry sources say that the $1.5 billion legal marijuana market could quadruple by 2018. and investors gathering here in denver want to hear from start-ups looking to make it big in this budding industry. >> we observe crete, bliss. >> what we're doing is building a digital support application
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for cannabis retail. >> they're looking more toward feeder industries. >> we wanted to standardize this process. >> and customer service, which is what dale is offering. he calls his online service butt tending. >> she may have a headache, and she wants to figure out what product is right for her. through our app she can find a butt tender near her, have a session with her and reserve that product for instore pickup at a later date. >> another startup here today has already raised $2 million from investors who are excited about its focus on personal pot. consumers can taylor how they want to feel. >> when you go to a bar right now, you have one choice, would you like to have a drink or not? would you like to get drunk or be sober. we have the opportunity to set
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someone on a path so they can have an array of different experiences when they try our products. >> the industry faces challenges, selling marijuana is a federal crime. as start-ups become more sophisticated in pitching investors, there will be plenty of profit in pot. josh lipton, nightly business report, denver, colorado. >> very creative with those company names too. >> yes, they are. that's nightly business report, thanks for watching. >> have a great evening, everybody, we'll see you tomorrow.
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